Financial Tsunami Ahead — About-Face Before It's Too Late!

by Helga Zepp-LaRouche

March 2011

This article was written by BueSo political leader and Schiller Institute founder Mrs. Helga Zepp LaRouche, and it is being distributed as a leaflet throughout Germany on the Ides of March. It has been translated from German and we are publishing it here for international circulation because of its relevance and urgency.

March 12--The victims of the worst earthquake that Japan has suffered in recorded history, deserve our full sympathy. And yet, the powerful tsunami, which washed away whole cities, towns, cars, and trees, as if they were match-sticks, could be viewed as a forewarning of an even greater tsunami, which could wash away the world financial system and most of our civilization at any moment--if we do not immediately reverse the errors that brought us into the current world crisis.

Consider the unbridled gambling methods with which "investors" are again speculating in the derivatives markets, just as they did before the outbreak of the 2007 crisis. Look at how incorrigibly most members of the government are clinging to their political prejudices, and realize that they are turning out to be completely incapable of understanding the mass-strike process which is breaking out worldwide, which, from Tunisia to Egypt, Bahrain, and India, to Wisconsin, Greece, and Saxony, is gripping more and more regions of the world. The famous lines come to mind from the poem "All Is Vanity" ("Es ist alles eitel"), which Andreas Gryphius wrote in the face of the horror of the Thirty Years War:

You will see wherever you look only vanity on this earth. What one man builds today, another tears down tomorrow; Where now cities stand, a meadow will be.... What now blooms in magnificence, will soon be trod asunder; What today pounds with defiance, tomorrow is ash and bone;|... Oh, what is all of this that we hold to be exquisite, But wicked vanity, but shadow, dust and wind, But a meadow flower which one can find no more; Yet not a single man wants to contemplate what is eternal.

For where have the last three and a half years of rescue packages for billions in gambling losses gotten us? Private debts from speculators and bankers, whose asets have long ago been exposed as being toxic waste, have been honored by willing governments with enormous sums of tax money. The liquidity created in this way was placed by the same gamblers into speculation, and drove raw materials and food prices into the stratosphere. This, in turn, was among the primary triggers of the uprisings in North Africa and other parts of the world, and threatens to bring hunger revolts in 80 countries, as the United Nations is warning.

And the euro? What is the result of the rescue package for Greece and Ireland, what is the fruit of all the purchased toxic state bonds and collateralization for bank loans from the European Central Bank? The conditions that the ECB, the IMF, and the EU Commission have tied to these packages, have driven these states further into ruin, again threatening state bankruptcy. The German government has now given in to the EU's pressure for replenishing the European Financial Stability Facility (EFSF), and soon the European Financial Stability Mechanism (EFSM), and thereby agreed to bleed the German taxpayer still more.

The rating agencies have even downgraded Spain to an Aa2, and Greece to the junk level B1, and are already circling like vultures around fallen prey. The reason that ECB head Jean-Claude Trichet is so vehemently resisting a "haircut," i.e., debt rescheduling for these states, naturally lies in the fact that it is by no means sure that the European banking system would survive this. Ever-expanding increase of the EFSF, on the other hand, leads to hyperinflation, just as by the U.S. Federal Reserve, which is preparing new "rescue packages" at full tilt. Hyperinflation like that of 1923 in Weimar, Germany is threatening, only this time on a world scale.

And since every German family knows in their bones what hyperinflation means--namely, the total destruction of their life savings--the German government has defended itself against this idea. Yet obviously it was not able to stand up against the enormous pressure from the EU and the IMF, which charged that Germany would be responsible for a "disorderly default," ultimately a collapse of the Eurozone, if no further tax money were put at their disposal.

Now, the president of the Constitutional Court in Karlsruhe, Andreas Vosskuhle, has delivered a highly interesting speech. He wanted to confront the prevalent opinion in the European Parliament and many EU states that the German high court is skeptical of European integration. The judges had found in the Maastricht Treaty decision of 1992 and the Lisbon Treaty decision of 2009, that the EU was only a coalition of nations, not a federal state, and in 1992, that the Currency Union was only constitutional if it provided durable security for the euro. It's precisely this that is no longer the case.

Vosskuhle further stressed the possibility, based on the country's Basic Law, that the Germans could change the Basic Law into a Constitution, through a referendum. With its rulings on the EU treaties, the Court only wanted to prevent competencies from being surreptitiously transferred to the EU level and without transparency. The five professors who filed suit in Karlsruhe against the EU's emergency rescue parachute, which had been adopted by the EU in May of last year, immediately emphasized their satisfaction in a press release, saying that Vosskuhle's declaration had confirmed that the euro rescue policy was the final step toward making the EU into a federal state, and thus the legitimacy of their constitutional complaint has been fully confirmed.

Thus, the options are reduced to two. Either Karlsruhe rules in the upcoming case, that Germany's participation in the rescue package violates the Basic Law, and then the government has no alternative but to withdraw its participation in the package--in that case, the euro would be finished, and a return to a sovereign currency, a new D-Mark, would be possible and necessary. Or the Court comes to the conclusion that participation is in conformity with the Basic Law, but, according to Article 146, the approval of the German population is required, through a referendum.

This means that the days of the euro are numbered. French President Nicolas Sarkozy, for this reason, held a closed meeting of members of the European Parliament on Nov. 14, 2007, to swear them to uphold the previous signing of the Lisbon Treaty, with the argument that a referendum would be dangerous, because referenda would lose in any country in which they were held. And for this very same reason, the members of the European Council had tried to practically whip the EU Treaty through the parliaments, without transparency and without open discussion.

But now comes the hour of truth. A referendum on whether we in Germany really want to give up the rest of our sovereignty to a bureaucracy in Brussels that is non-transparent and not accountable to the voters, a bureaucracy which has served as the perfect bailiff for the financial oligarchy, would be an honorable solution. The citizens have long ago had enough of absurd EU regulations, which are ruining our industry and agriculture and which impose the green paradigm by decree, as if "from above."

Herein lies the reason for the introduction of E-10 (ethanol), and with it, the squandering of arable land urgently needed for the growing of food, for the manufacture of biofuels--one of the many destructive EU regulations. Because, next to criminal speculation in foodstuffs, a major reason for the world's growing hunger catastrophe is the equally criminal destruction of foodstuffs for ethanol.

If the Greens now assert that E-10 was a mistake of the government, and that they were always against biofuels, this is such an outrageous lie that the Greens apparently assume that the whole population suffers from Alzheimer's. Who is responsible for the whole green paradigm that has burdened us through and through with an irrational complex of subjects such as the purported limitation of resources, overpopulation, anthropogenic climate change, environmental green zones instead of infrastructure construction, price explosion thanks to inflationary licensing requirements, totally inefficent renewable energy sources, etc.? The votes and speeches of the Greens on biofuels in the European Parliament are clear: They were for biofuel.

We must realize, that over the last 40 years we have found ourselves on a wrong course which involves the casino economy as well as the green paradigm. To return to Andreas Gryphius: "Not a single man wants to contemplate what is eternal." But it is exactly this, namely the eternal laws of the divine order of creation, with it the physical creation, which we must learn to understand more deeply, and to research better. And these laws are subject neither to the God of Mammon, nor Mother Gaia, but they are anti-entropic; that is, the universe is creative, it develops permanently to higher and higher complexities.

If we want to be in a position, in a timely manner, to anticipate natural catastrophes such as earthquakes, tsunamis, volcanic eruptions, threatening meteor showers, climate change, etc., not to mention eventually to master them, then we must learn to better understand what happens in our universe. We must understand the long-range cycles of our galaxy, its impact on our Solar System, and its influence on the processes on Earth.

And then we will come to the conclusion, that humanity can only secure its long-term existence, if we take seriously the mandate of the Book of Genesis, and further the process of creation, as imago viva dei, as the living image of God, and this means, above all, the ever deeper discovery of the laws of the universe. If we would consider "what is eternal," we will reach the next step in the development of mankind.

But for that, we still must absolutely face the fact that we immediately need a global two-tier banking system in the tradition of the Glass-Steagall standard of Franklin D. Roosevelt. The toxic waste must be written off the books, and the commercial banks must be capitalized in a new credit system with credit for the real economy. The reconstruction, not only of Japan, but of the entire world, must be launched according to the principles of physical economy.

And as far as the popular referendum on the rescue packages is concerned: We can be optimistic that sanity and reason will prevail!

Thank you for supporting the Schiller Institute. Your contributions enable us to publish, sponsor conferences, and support other activities which are critical interventions into the policy making and cultural life of the nation and the world.